Search

Burberry shares snapped up after better results

Whilst these are not results which shoot the lights out, Burberry (BRBY) will be pleased with its progress given the fact that it is in the early stages of its planned transformation.

Full-year pre-tax profit was marginally ahead of expectations, cost savings were above plan and there was a positive contribution from its retail arm. Meanwhile, the increasingly important Asia Pacific region, and mainland China in particular, showed continuing growth in an area in which potential riches abound.

Overall, comparable store sales rose by 3% and the net cash buffer which exceeds £890 million gives the company some strategic room for manoeuvre. The dividend yield of 2.2% is not especially punchy, although the policy is progressive, while the announced share buyback should provide further support.

Source: interactive investor Past performance is not a guide to future performance

Less positively, the numbers are shy of some of Burberry's high-end fashion peers, and revenues are in line with expectations although for the most part flat.

Its home market in the UK is still finding it difficult to make a strong contribution, while the overall transformation strategy comes with implementation risks attached as the rest of the sector continues to focus on established and well-worn successes.

Even so, given the disruptive backdrop, these numbers show meaningful progress. The share price has risen 17% over the last three months, while over the last year the 9% improvement has outstripped the wider FTSE 100 (UKX), which has added 3.6%.

The steps which have been taken so far, alongside a potentially bright outlook, have resulted in the general market view also warming of late, with the consensus nudging higher to a cautious 'buy'.

These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation, and is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.